This article first appeared in The Edge Financial Daily on March 6, 2020

KUALA LUMPUR: CIMB Bank Bhd and CIMB Islamic Bank Bhd are reducing their base rate and fixed deposit rate/fixed return income account-i board rates by 25 basis points (bps), in line with the overnight policy rate (OPR) cut announced by Bank Negara Malaysia (BNM) on Tuesday.

Similarly, all financing facilities based on the Base Lending Rate and Base Financing Rate will be reduced by 0.25%, said CIMB Bank in a statement yesterday, adding that all the rate changes will take effect on March 9.

The announcement came after BNM made its second OPR cut in less than two months on Tuesday, when it reduced the key rate by 25bps to 2.5% from 2.75%. It last adjusted the rate downward on Jan 22, to 2.75% from 3%.

Subsequently, banks have been announcing rate revisions to adjust to the new OPR.

“This second OPR cut for 2020 reflects the crucial need to support the Malaysian economy in the face of a potentially prolonged disruption to economic activity due to Covid-19. We trust the OPR cut, coupled with the RM20 billion stimulus package announced recently, will bring better prospects for continued economic growth,” said CIMB Group Holdings Bhd group chief executive Tengku Datuk Seri Zafrul Aziz.

As the situation remains fluid, Zafrul said the banking group hopes that actions taken by both the public and private sectors will ensure businesses are well supported to ride through the current challenges.

“CIMB is doing its part to help our customers, which includes restructuring and rescheduling financing facilities, where necessary,” he added.

CIMB shares slipped four sen to close at RM4.50 yesterday, giving it a market capitalisation of RM44.65 billion.